Exhibit 99.1


Digital Brands Group Reports Fourth Quarter and Fiscal Year 2022 Financial Results


Expects to generate internal free cash flow of $500,000 per month starting in October


AUSTIN, Texas, April 17, 2023 /PRNewswire/ -- Digital Brands Group, Inc. ("DBG") (NASDAQ: DBGI), a curated collection of luxury lifestyle, digital-first brands, today reported financial results for its fourth quarter and 2022 fiscal year ended December 31, 2022.


Our fourth quarter and fiscal year 2022 financial results do not include the impact and results from our acquisition of Sundry on December 30, 2022. Our acquisition of Sundry has had a significantly positive impact on our year-to-date results, as we noted on our State of the Union call in March, which includes the expectation to generate $500,000 in internal cash flow per month starting in October.


Results for the Fiscal 2022


Net revenues for fiscal 2022 increased 84.2% to $14.0 million compared to $7.6 million in 2021


Gross margin profit increased 218.5% to $6.0 million compared to $1.9 million in a year ago


G&A expenses of $16.4 million declined by $400,000 compared to $16.8 million a year ago


Sales and marketing expenses were $5.0 million compared to $3.8 million a year ago


Distribution expenses were $612,000 compared to $489.000 million a year ago


Net loss attributable to common stockholders was $38.0 million, or $49.32 per share, compared to $32.4 million, or $424.15 per share, a year ago


Results for the Fourth Quarter


Net revenues were $3.4 in the fourth quarter of 2022 compared to $4.0 million a year ago


Gross margin was $642,000 versus $472,000 a year-ago


G&A expenses were $3.1 million versus $2.5 million a year ago


Sales & Marketing expenses decreased $420,000 to $1.0 million from $1.4 million a year ago


Net loss attributable to common stockholders was $15.8 million, or $20.46 per share compared to $9.7 million, or $127.13 per diluted share, a year ago


"Our business is completely different now than it was in 2022. We lost a year due to the market decline in 2022, which delayed our acquisition of Sundry. We knew this acquisition was the critical step in our path to create a company with scale, positive ebitda and positive cash flow. Now that the Sundry acquisition has happened, we are well on our way to achieving our initial goals," said Hil Davis, Chief Executive Officer of Digital Brands Group.


Davis continued, "In October of last year we had a positive change in our working capital cycle model due to our ability to start factoring our wholesale orders. In October of this year, we expect another more significant positive change to our cash flow, which is the end of our MCA weekly payments. Once we make our last weekly MCA payment, our business will generate over $490,000 in cash flow a month due to these weekly payments now flowing to our balance sheet. This is a significant swing in our cash flow and will be in addition to our ability to factor our wholesale orders and our expectation of positive ebitda later this year."





Conference Call and Webcast Details Updated


Management will host a conference call on Monday, April 17 at 4:30 p.m. ET to discuss the results. The live conference call can be accessed by dialing (866) 605-1828 from the U.S. or internationally. The conference I.D. code is 13738180 or via the web by using the following link: https://event.choruscall.com/mediaframe/webcast.html?webcastid=6iDznF2B.


Forward-looking Statements


Certain statements included in this release are "forward-looking statements" within the meaning of the federal securities laws. Forward-looking statements are made based on our expectations and beliefs concerning future events impacting DBG and therefore involve several risks and uncertainties. You can identify these statements by the fact that they use words such as "will," "anticipate," "estimate," "expect," "should," and "may" and other words and terms of similar meaning or use of future dates, however, the absence of these words or similar expressions does not mean that a statement is not forward-looking. All statements regarding DBG's plans, objectives, projections and expectations relating to DBG's operations or financial performance, and assumptions related thereto are forward-looking statements. We caution that forward-looking statements are not guarantees and that actual results could differ materially from those expressed or implied in the forward-looking statements. DBG undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. Potential risks and uncertainties that could cause the actual results of operations or financial condition of DBG to differ materially from those expressed or implied by forward-looking statements include, but are not limited to: risks arising from the widespread outbreak of an illness or any other communicable disease, or any other public health crisis, including the coronavirus (COVID-19) global pandemic; the level of consumer demand for apparel and accessories; disruption to DBGs distribution system; the financial strength of DBG's customers; fluctuations in the price, availability and quality of raw materials and contracted products; disruption and volatility in the global capital and credit markets; DBG's response to changing fashion trends, evolving consumer preferences and changing patterns of consumer behavior; intense competition from online retailers; manufacturing and product innovation; increasing pressure on margins; DBG's ability to implement its business strategy; DBG's ability to grow its wholesale and direct-to-consumer businesses; retail industry changes and challenges; DBG's and its vendors' ability to maintain the strength and security of information technology systems; the risk that DBG's facilities and systems and those of our third-party service providers may be vulnerable to and unable to anticipate or detect data security breaches and data or financial loss; DBG's ability to properly collect, use, manage and secure consumer and employee data; stability of DBG's manufacturing facilities and foreign suppliers; continued use by DBG's suppliers of ethical business practices; DBG's ability to accurately forecast demand for products; continuity of members of DBG's management; DBG's ability to protect trademarks and other intellectual property rights; possible goodwill and other asset impairment; DBG's ability to execute and integrate acquisitions; changes in tax laws and liabilities; legal, regulatory, political and economic risks; adverse or unexpected weather conditions; DBG's indebtedness and its ability to obtain financing on favorable terms, if needed, could prevent DBG from fulfilling its financial obligations; and climate change and increased focus on sustainability issues. More information on potential factors that could affect DBG's financial results is included from time to time in DBG's public reports filed with the SEC, including DBG's Annual Report on Form 10-K, and Quarterly Reports on Form 10-Q, and Forms 8-K filed or furnished with the SEC.







   Three Months Ended   Year Ended 
   December 31,   December 31, 
   2022   2021   2022   2021 
               As Restated 
Net revenues  $3,375,245   $4,009,645   $13,971,178   $7,584,859 
Cost of net revenues   2,732,897    3,537,564    8,030,908    5,716,587 
Gross profit   642,348    472,081    5,940,270    1,868,272 
Operating expenses:                    
General and administrative   3,145,228    3,931,675    16,371,536    16,752,516 
Sales and marketing   979,355    1,409,261    4,950,635    3,810,583 
Distribution   89,059    250,597    611,569    489,371 
Impairment   15,539,332    3,400,000    15,539,332    3,400,000 
Change in fair value of contingent consideration   (5,854,052)   1,725,066    564,303    8,764,460 
Total operating expenses   13,898,922    10,716,599    38,037,375    33,216,930 
Loss from operations   (13,256,574)   (10,244,518)   (32,097,105)   (31,348,658)
Other income (expense):                    
Interest expense   (2,963,845)   (1,643,115)   (9,014,337)   (3,663,921)
Other non-operating income (expenses)   438,395    2,189,156    3,068,080    1,554,502 
Total other income (expense), net   (2,525,450)   546,041    (5,946,257)   (2,109,419)
Income tax benefit (provision)   -    -    -    1,100,120 
Net loss  $(15,782,024)  $(9,698,477)  $(38,043,362)  $(32,357,957)
Weighted average common shares outstanding -                    
basic and diluted   771,297    76,289    771,297    76,289 
Net loss per common share - basic and diluted  $(20.46)  $(127.13)  $(49.32)  $(424.15)


The accompanying notes are an integral part of these financial statements.







   Year Ended 
   December 31, 
   2022   2021 
Cash flows from operating activities:          
Net loss  $(38,043,362)  $(32,357,957)
Adjustments to reconcile net loss to net cash used in operating activities:          
Depreciation and amortization   2,226,376    1,220,736 
Amortization of loan discount and fees   6,506,384    1,382,222 
Stock-based compensation   602,038    4,800,337 
Fees incurred in connection with debt financings   568,149    560,309 
Change in fair value of warrant liability   (18,223)   11,958 
Change in fair value of derivative liability   (1,354,434)   (910,204)
Change in fair value of contingent consideration   564,303    8,764,460 
Impairment of goodwill and intangible assets   15,539,331    3,400,000 
Forgiveness of Payroll Protection Program   (1,760,755)   (407,994)
Change in credit reserve   (118,840)   36,893 
Deferred offering costs   367,696    - 
Deferred income tax benefit   -    (1,100,120)
Changes in operating assets and liabilities:          
Accounts receivable, net   (475,036)   150,288 
Due from factor, net   655,708    (399,701)
Inventory   471,831    (911,293)
Prepaid expenses and other current assets   (402,515)   (151,917)
Accounts payable   919,131    456,690 
Accrued expenses and other liabilities   1,992,649    834,489 
Deferred revenue   (74,268)   4,882 
Due to related parties   278,590    (63,550)
Accrued interest   984,358    461,113 
Net cash used in operating activities   (10,570,889)   (14,218,359)
Cash flows from investing activities:          
Cash acquired (consideration) pursuant to business combination   (7,247,303)   (5,936,757)
Purchase of property, equipment and software   (5,533)   (43,179)
Deposits   (60,548)   (31,117)
Net cash used in investing activities   (7,313,384)   (6,011,053)
Cash flows from financing activities:          
Repayments of related party notes   (170,000)   - 
Advances (repayments) from factor   (3,096)   (41,200)
Repayment of contingent consideration   (645,304)   - 
Proceeds from venture debt   237,500    - 
Issuance of loans payable   3,280,360    2,779,910 
Repayments of convertible and promissory notes   (7,437,349)   (2,006,628)
Issuance of convertible notes payable   6,951,250    8,433,650 
Proceeds from public offering   19,347,446    10,000,002 
Exercise of over-allotment option with public offering, net   -    1,364,997 
Exercise of warrants   -    1,768,046 
Offering costs   (2,921,646)   (2,116,957)
Net cash provided by financing activities   18,639,161    20,181,820 
Net change in cash and cash equivalents   754,888    (47,592)
Cash and cash equivalents at beginning of period   528,394    575,986 
Cash and cash equivalents at end of period  $1,283,282   $528,394 


The accompanying notes are an integral part of these financial statements.







   December 31, 
   2022   2021 
Current assets:          
Cash and cash equivalents  $1,283,282   $528,394 
Accounts receivable, net   628,386    89,394 
Due from factor, net   839,400    985,288 
Inventory   5,225,282    2,755,358 
Prepaid expenses and other current assets   853,044    417,900 
Total current assets   8,829,394    4,776,334 
Deferred offering costs   -    367,696 
Property, equipment and software, net   76,657    97,265 
Goodwill   10,103,811    18,264,822 
Intangible assets, net   14,427,503    12,841,313 
Deposits   198,342    137,794 
Right of use asset   102,349    - 
Total assets  $33,738,056   $36,485,224 
Current liabilities:          
Accounts payable  $8,098,165   $6,562,690 
Accrued expenses and other liabilities   4,457,115    2,237,145 
Deferred revenue   202,129    276,397 
Due to related parties   556,225    277,635 
Contingent consideration liability   12,098,475    12,179,476 
Convertible note payable, net   2,721,800    100,000 
Accrued interest payable   1,561,795    1,110,679 
Note payable - related party   129,489    299,489 
Venture debt, net of discount   -    6,001,755 
Loan payable, current   1,966,250    2,502,000 
Promissory note payable   9,000,000    3,500,000 
Right of use liability, current portion   102,349    - 
Total current liabilities   40,893,792    35,047,266 
Convertible note payable, net   -    5,501,614 
Loan payable   297,438    713,182 
Derivative liability   -    2,294,720 
Warrant liability   -    18,223 
Total liabilities   41,191,230    43,575,005 
Commitments and contingencies          
Stockholders' equity (deficit):          
Undesignated preferred stock, $0.0001 par, 10,000,000 shares authorized, 0 shares          
 issued and outstanding as of both December 31, 2022 and 2021   -    - 
Series A preferred stock, $0.0001 par, 1 share authorized, no shares issued and outstanding as of          
December 31, 2022 or 2021   -    - 
Series A convertible preferred stock, $0.0001 par, 6,800 shares designated, 6,300 shares issued and          
outstanding as of December 31, 2022, none authorized or outstanding as of December 31, 2021   1    - 
Common stock, $0.0001 par, 1,000,000,000 shares authorized, 4,468,939 and 130,018 shares          
issued and outstanding as of December 31, 2022 and 2021, respectively   447    13 
Additional paid-in capital   96,293,694    58,614,160 
Accumulated deficit   (103,747,316)   (65,703,954)
Total stockholders' equity (deficit)   (7,453,174)   (7,089,781)
Total liabilities and stockholders' equity (deficit)  $33,738,056   $36,485,224 


The accompanying notes are an integral part of these financial statements.





About Digital Brands Group


We offer a wide variety of apparel through numerous brands on a both direct-to-consumer and wholesale basis. We have created a business model derived from our founding as a digitally native-first vertical brand. Digital native first brands are brands founded as e-commerce driven businesses, where online sales constitute a meaningful percentage of net sales, although they often subsequently also expand into wholesale or direct retail channels., Unlike typical e-commerce brands, as a digitally native vertical brand we control our own distribution, sourcing products directly from our third-party manufacturers and selling directly to the end consumer. We focus on owning the customer's "closet share" by leveraging their data and purchase history to create personalized targeted content and looks for that specific customer cohort. We have strategically expanded into an omnichannel brand offering these styles and content not only on-line but at selected wholesale and retail storefronts. We believe this approach allows us opportunities to successfully drive Lifetime Value ("LTV") while increasing new customer growth.


Digital Brands Group, Inc. Company Contact 

Hil Davis, CEO 

Email: invest@digitalbrandsgroup.co 

Phone: (800) 593-1047